PERTH (miningweekly.com) – ASX-listed metals developer Avanco Resources was hoping to be in production within the next 12 months, with the company announcing on Wednesday it had secured A$80-million to complete the Stage 1 development of the Antas project, in Brazil.

The financing structure would comprise a placement of about 249.2-million shares, at 8c each, to raise A$19.9-million. The offer price represented a premium of 8.41% to the company’s 30-day volume weighted average price, and would be issued under Avanco’s 15% placement capacity.

In addition to the placement, Avanco would also undertake a nonrenounceable entitlement offer to existing eligible shareholders, on a two-for-seven basis, to raise a further A$44.2-million. The entitlement offer would also be priced at 8c a share.

On the successful completion of both the placement and the entitlement issue, and on finalising a royalty transaction with fund manager Black Rock, Avanco would secure a further A$15.6-million.

The company told shareholders on Thursday that on completion of the financing package, Avanco would be fully financed into production, while being debt free and unhedged.

The decision to pursue an equity financing structure for the Antas project resulted from concerns that the bank syndication process would not have been closed within Avanco’s timetable. As a result, the company felt it necessary to examine alternative funding structures.

With the dry season approaching, the company said that a preferred funding option was one that would provide fast, viable and assured finance, thus mitigating holding costs and exposure to construction inefficiencies arising from further delays.

Construction was scheduled to last some seven to nine months, and Avanco said that commissioning was planned before the end of 2015, with ramp-up likely to be achieved in the first quarter of 2016.

Avanco is currently aiming to mine about 12 000 t/y of copper and 7 000 oz/y of gold under the Stage 1 development at Antas, and the project will require A$78-million in funding.